Making Blunders

​There are many ways to make mistakes on your tax return and many different kinds of people make them. We have seen this recently as actor Danny Trejo has declared bankruptcy as part of a plan to handle a $2 million tax debt.

There are few details available about this, but Trejo flippantly joked that he has learned dog grooming is not a legitimate expense. This would be one thing if he was handling his taxes himself, but as someone who runs multiple businesses and whose acting work probably takes him across many states in most years, that would have been a tough task for him to handle alone. But hey, maybe he did, and maybe he legitimately concluded some things were deductions that should not be.

“I take my dog to photo shoots with me, if she ends up in the picture, I need her to look good for my own image.” I can follow this train of logic where it seems reasonable anyway.

But if he did have help, then shouldn’t he have received better advice than what he got? We cannot be afraid to work with people who will tell us “no” and not simply seek someone who gives the answers we want. This also applies if you’re doing it by yourself, you need to be able to check yourself and not wish things into compliance.

This can be seen in another story involving tracking mileage for work.  On the surface, there is nothing wrong with this, for taxpayers are allowed deductions for legitimate business use of a vehicle. There are rules surrounding this, though, and the most important one may be the need to keep a mileage log.

Now, this story even has a taxpayer who submitted a mileage log to the IRS. But then, the agency could not corroborate that the places he was traveling to were locations where he would have conducted business. And some places were visited on the same day across different years. This seems like a half-hearted effort that was then copy and pasted.

At least in this case, it seems clear that the taxpayer was really trying to get away with something. It’s much more of a ‘well, you just got caught’ feeling. But maybe this was someone well intentioned, again. Maybe they really did travel for work but did not keep an actual log as they were going, and tried to create something that would give them a bit of what they would have been legitimately entitled to. Again, someone who could give them real answers may have helped.

So if you do have any questions about handling your taxes, seek out an expert, and ask quick before their calendar gets too full during this busy season.

​Warmly,

Josh Bousquet
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